News From The Pit

This Old Guitar
By Jimmy Brown

A few rambling thoughts on investing.

I have recently been engaged in conversations with different people concerning their vintage guitars. The typical scenario goes like this: a senior citizen brings in their guitar. It is something they bought new, decades ago. They had an idea that perhaps it was reasonably valuable today, so they wanted my advice/counsel on what to do. Since they cannot chop the instrument up in thirds, in order to provide equal inheritance to their heirs, they ask me what they should do. All of the recent incidents have involved guitars that were in remarkable condition and were worth many thousands of dollars.

I first let them know what their vintage guitar is worth in terms of dollars and cents. We have to keep in mind that some of these guitars have a completely different sentimental value and some of the owners are concerned and rightly so, that their children may not have the same appreciation for the guitars that they have had all these years. I tend to agree and suggest they go ahead and sell the guitars, which will enable them to split the money up equally.

Sometimes they are not quite ready to part with their pride and joy and I encourage them to at least get a legitimate appraisal and think through what their options are. As in the case of the '66 Fender Precision Bass, I let them know they could have done worse and bought a Gibson EB-0 instead! Or in the case of the '56 Fender Telecaster, they could have purchased a Fender Duo-Sonic. The point being that although the Gibson bass and the Duo-Sonic were just as popular at the time, today they are worth only a fraction of the P-Bass and Tele. So, the guitar fates shined their light on these particular instances. It usually is not the case. So I try to let these people know that they are fortunate; not only did they get years of enjoyment out of their guitars, but unbeknownst to them, they made great investments at the same time.

I get people all the time asking me about a guitar they are thinking of purchasing. New or used, it does not matter. They want to know what I think it will be worth in twenty years. Well, the last time I checked my black Magic Eight Ball, it said "Cloudy, Try Again" The Ouija board said "Check Back Later." My crystal ball said the future was too cloudy to see. So, armed with all of that, I generally suggest that people buy the guitar because they like it. If it goes up in value, then bully for them. If its value does not appreciate, then at least you have had the fun of playing a guitar you liked from the start.

In the recent past, say five years or so, I have seen people do well in the stock market and, with their new-found wealth, have some fun buying guitars. I have also seen people lose their butts in the stock market and have to sell off their guitars to help make ends meet. I reckon most of us have had some similar experience, particularly with the latter. Whether it's your IRA account from work, your kid's college fund, or whatever, all of a sudden it's gone!

Which brings me to some other instances where I know people who stayed away from the more typical investment scenarios (stock market, life insurance, etc.) and put their money in vintage guitars. Now, these type of investments are not as prone to wild fluctuations. They generally just creep up through the years, some more than others. Given all these possibilities , I certainly do not know which is the best avenue. Some people did well with stocks and some did not. The same can be said for vintage guitars. Here are some examples to consider:

I sold a 1959 Gibson Les Paul in 1987 for $10,000. That seemed like a lot to me at the time. Fifteen years later and that same guitar was bringing in the neighborhood of $100,000, or ten times the amount.

In 1983, I sold a 1929 Martin OO-45 for $3000. Fifteen years later, it was roughly a $30,000 item. Again, ten times the amount. Now, I am no stockbroker, so I really can't comment on how that would have compared to a safe money market, or blue chip stock investment, but my gut feeling is that both the Les Paul and Martin were great investments, besides the fact that you can have lots of fun with the guitars. I would imagine that there were some stocks that did considerably better than those guitars. However, on the safety side, most guitars have not gone down in value. The same can't be said for the stock market. Also, not all guitars have been great investments. For example, a mid-Sixties Fender Mustang was bringing roughly $350 in 1987. Fifteen years later, it might bring $700, or double the amount. The same could be said for a vintage Gibson Melody Maker. It has roughly doubled in value. So, if someone comes to me and tells me they want to buy a guitar for investment purposes, I would suggest that your blue chip guitars, the vintage Les Pauls, Martin and Gibson flat tops, vintage Fender Strats and Teles, are historically the ones that have done well. There are many others that qualify, but this column will not permit the time nor space for that discussion, at least not right now. Also, there are modern guitars that have proven their worth. Usually they are high end, limited-edition guitars from well-known makers.

So after all of that rambling, I guess I am back to square one. The people at the beginning of this column were not thinking about investment potential when they bought their Fender Telecaster, or their Fender Precision Bass. No, they were just buying what they liked. The person who bought that Fender Mustang in 1965 was probably very happy with his guitar, too, even though it never really when up in value. I know I loved my Kay Truetone electric I got in 1965. (I still have it today.) I also love my 1965 Olympic White Fender Jazz Bass. The Kay is barely worth more today, than it was in 1965. The Fender Jazz Bass, on the other hand, is worth way more than I paid for it. But the bottom line is that I got them because I liked them. I like one as much as I do the other: the Kay Truetone for sentimental reasons and the Jazz Bass because it is my workhorse. As far as telling the future, I am not much help. So again, I say buy what you like. Some guitars are destined to be great investments and others, well, you can love them too.

Oh, by the way. I did notice a lady at a table out in her front yard on Bardstown Road here in the Highlands. She reads palms. Maybe she can help you decide.

So I guess that's all for now.

Until next time,

Keep Rockin'.